UK Services Sector continues post-Brexit vote recovery

Activity in the UK services sector grew more than expected in September, according to data released on Wednesday. The Markit/CIPS UK Services Purchasing Managers’ Index showed that business activity rose for the second month running, following a sharp drop in July linked to uncertainty surrounding the UK’s vote to leave the EU. New business opportunities and customer enquiries also strengthened, rising at the fastest pace since February. The weaker pound did however exert upward pressure on service sector input prices which saw its largest rise since February 2013.

David Noble, group CEO, CIPS, the Chartered Institute of Procurement & Supply, explains: “Firms raised their prices in response, to counteract increased costs for fuel, food and elevated wage bills and as the weaker pound had an effect.”

“Though business optimism improved further from July’s seven-and-a-half-year low, and was the strongest for three months, disquiet around Brexit still remained. The sector concentrated on stabilising rather than forging ahead with confidence, as optimism stayed below the longterm average.”

Commenting further, Chief economist at Markit, Chris Williamson, said: "The survey results suggest that the economy has regained modest growth momentum since the EU referendum, with further service sector expansion accompanied by a return to growth in construction and an especially strong revival of manufacturing.”

Click here to view the Markit / CIPS UK Services PMI in full.